What is the difference between a bookkeeper and an accountant?

The basic differences between a bookkeeper and an accountant are skill sets and rates. A bookkeeper charges less, but may have limited skills. Many bookkeepers have taken only high school courses and have held data entry positions. An accountant usually has a 4 year degree and, if certified, must participate in continuing education. An accountant's rates, however, can be triple that of a bookkeeper.

Take advantage of the rate differential by using a bookkeeper with a higher skill set to maintain your financial records. This will minimize the amount of time and money you spend on a tax accountant. Look for a bookkeeper that has a college degree in accounting and related experience, as well as pertinent certifications. Ask for the resume. When you talk to references, ask what the accountant has said about the bookkeeper.

If you use QuickBooks, hire a bookkeeper that is a Certified QuickBooks ProAdvisor. At a minimum, you know that person has passed the tests for particular versions of QuickBooks. Even better, hire a ProAdvisor that has passed the Advanced Certification test, which includes questions about accounting and payroll.

If you are not sure how competent your current bookkeeper is, ask your accountant. You can also find a bookkeeper that offers a free initial consultation to review your books and give an opinion. Having a good bookkeeper saves money in the long term by ensuring that your financial records are in order.